EAA Publications
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| The Freshman |
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| Think twice on exclusive
agency |
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In instructing an estate
agent to sell or lease a property, the owner has the right to
grant either exclusive or non-exclusive agency. If the owner
chooses exclusive agency, he has to pay special attention to
his liability under this form of agency appointment, and its
validity period.
A few months ago, Ms Wong went to an estate agency, A Co, to
list her flat for sale. When signing the estate agency agreement,
she was persuaded by the agent to list the flat exclusively
to the agency, effective for six months. That was to say, within
the period of six months, A Co was the exclusive agent of Ms
Wong for listing, advertising and introducing prospective buyers.
If the flat was sold through another estate agent during the
validity period of the estate agency agreement, A Co could demand
commission from Ms Wong.
Ms Wong's flat was not yet sold two months after she had listed
it with A Co. So she listed the flat with other agents and succeeded
in selling it through B Co a month later. About a month after
signing the provisional agreement for sale and purchase, Ms
Wong received an invoice from A Co for commission. Ms Wong refused
to pay the commission on the ground that A Co had failed to
sell the property for her. Needless to say, the two sides had
a long dispute on that.
Commission disputes arising from exclusive agency are not uncommon.
In order to avoid the kind of disputes mentioned above, an estate
agent, when signing an estate agency agreement with an owner,
should explain to him in detail the meaning and the legal effect
of exclusive agency. The owner, before having a clear idea of
an agent's service, should consider carefully whether to list
his property exclusively with the agent. If he chooses exclusive
agency, its validity period should be clearly stated in the
agreement, and the period should not be too long. Where an exclusive
agency is granted, the owner must be clearly aware that he may
have to pay the exclusive agent a commission even though the
property is sold through another agent, as long as the sale
is effected during the validity period.
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